Why a Port Authority?
Historically, port authorities were created to conduct maritime activities, and later airport activities. But in Ohio, port authorities have evolved as an economic development tool. As independent units of government, Ohio port authorities may conduct the traditional waterborne and air transportation activities, as well as own property and provide financing for local economic development initiatives.
Ohio law defines the authorized purposes of a port authority as...
activities which increase, foster, aid, or promote air or water transportation, economic development, or residential facilities within the jurisdiction of the port authority.
The law further defines a port authority facility as...
all real or personal property, or combination thereof, related to or used in any commercial, industrial, distribution, transportation, residential, recreational, educational, cultural, or research facility, including aviation facilities and waterport facilities.
Cincinnati’s Port Authority
A Powerful Economic Development Tool Kit
The Port of Greater Cincinnati Development Authority is governed by a board of directors that represents a broad mix of business expertise, including development, design, finance and marketing. They bring to the organization a wealth of experience and knowledge as well as a sensitivity to business needs and market forces.
As under Ohio law, a port authority has a broad range of project management and funding capabilities - “tools” - that position it to play a unique role within communities. A port authority’s “tool kit” consists of these important capabilities that enable it to participate creatively in a variety of ways in economic development projects:
Project Financing:
A fundamental strength of port authorities is leadership in developing innovative project financing.
Special Financings, Projects and Programs:
Revenue Bonds: Port authorities may provide conduit financing in the form of revenue bonds. These bonds are based on the credit worthiness of the borrower and backed by a letter of credit from a financial institution. The proceeds of the revenue bonds may be used for public facilities or properties to be owned by the port authority. Examples of these financings include Empowerment Zone Tax Exempt Bonds, Tax Increment Financing Bonds, and Tax Exempt Industrial Development Bonds.
Project Incentives: Port authorities may act as the central point of contact, investigating and procuring local, state and federal business-retention and expansion incentives.
Grant Programs: Ohio’s port authorities may apply for local, state, and federal grant funds, which generally are used for public infrastructure improvements made in support of local economic development efforts.
Common Bond Fund Programs:
These programs provide credit enhancements and long-term, fixed-rate loans that make it possible for companies to access capital markets which may not otherwise be accessible. The common bond fund programs are a tool that supplements the financing options available to small- and medium-sized companies within the community. In addition, the Port of Greater Cincinnati Development Authority has access to the Ohio Enterprise Bond Fund Program.
Lease Financing Options:
This involves the ownership and leasing of a project to provide financial and accounting advantages to corporate users. Lease financings have been used to convey a variety of incentives, such as sales tax exemption on building materials incorporated into buildings owned by a port authority and accounting advantages to the lessee/user of the project. Lease financings have typically been undertaken by port authorities in the categories of capital lease, operating lease, or synthetic lease.
Property Ownership:
Port authorities may own and improve property if doing so helps to create business development opportunities. This is especially helpful when a property has a negative value, as in the case of a brownfield site where barriers such as liens and environmental issues are impediments to redevelopment. Further, a port authority may lease, for its use or to other public or private entities, real or improved property.
Project Coordination:
Port authorities can facilitate and coordinate the various regulatory approvals needed from multiple agencies or jurisdictions, particularly for brownfield projects. As a result, the development process is streamlined, and projects can move forward more quickly and
efficiently. Thus, port authorities enhance and supplement a community’s ability to accomplish development projects.
These tools, along with a lean organizational structure and can-do attitude, afford the Port of Greater Cincinnati Development Authority the flexibility to forge partnerships with local, state and federal governments, as well as the private sector in ways that encourage economic development.
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To learn more about Port Authority Tools,
click on the links below
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